Friday, April 18, 2008

Affluent cope with economy through savvy shopping

Americans have pushed steadily into the suburbs, transforming the landscape and (until recently) leaving cities behind. But today the pendulum is swinging back toward urban living, and there are many reasons to believe this swing will continue.Westlake Village, Calif.—A search for certainty, children's preferences and business discipline are shifting the affluent consumer's purchasing habits, according to The Second Annual Survey of Affluence and Wealth in America, produced by American Express Publishing Corp. and the Harrison Group.

The survey, which polled approximately 1,800 individuals with $100,000 or more in annual discretionary household income, found that 70 percent of affluent consumers are choosing to shop "high tech," using Internet strategies to identify, price, compare and sometimes buy significant fashion and home purchases online. These consumers tend to choose online outlets when they are pressed for time, when their past in-store experience did not meet delivery or fulfillment needs, and when they are unafraid of fraud.The remaining 30 percent are "high touch" and prefer to shop alone, in-store, with a knowledgeable salesperson.They tend to choose an in-person retail experience when it involves less than 30 minutes of travel time, when they want to savor the shopping experience, when they are searching for something unique and when they believe a salesperson will add value.

"Our research illustrates how today's affluent and wealthy consumers consider a variety of marketplace and lifestyle factors when making purchasing decisions, be it online or in-store," American Express Publishing Corp. President and CEO Ed Kelly said in a media release. "These customers are also searching for greater certainty in their shopping experiences—whether it's the certainty of excellent value or the certainty of quality. Clearly, it's a new game for luxury marketers and a considerable opportunity to understand and anticipate these changing behaviors and purchasing patterns."

The survey also found that the female head of household, working or not, often manages the day-to-day running of upscale households. Eighty-one percent of respondents (both men and women) said the primary responsibility for buying supplies, including groceries, household necessities, apparel and high-tech needs, is handled by the wife, compared with 26 percent by the husband.Mothers in upscale households, in turn, depend upon their children for ideas on brands to buy, places to shop, technology to deploy, vacation ideas and even "home capital spending choices." Fifty-three percent of respondents report an inclination to purchase "brands that are preferred by my children".

Meanwhile, today's well-to-do families, far removed from the current sub-prime mortgage crisis, have financial anxieties. While nearly three-quarters of respondents (73 percent) are extremely or very optimistic about their own future, only 30 percent share that optimism about the future of America, and even less (26 percent) share this feeling about the future of the world. The study reveals that the more money the respondents have, the less anxious they are.

Purchase decisions for the affluent are driven by specific needs, either to replace a product (57 percent), upgrade an existing product (35 percent) or purchase a new product for a specific occasion (35 percent).In contrast, only one-third of respondents are spurred by browsing. Purchase decisions are largely made due to personal experience (71 percent) and family and friends (37 percent), followed by point-of-sale elements such as salespeople and the in-store experience (35 percent).

Among mass media, the Internet (43 percent) and magazines (30 percent) are cited as the top purchase influencers of the affluent. Just over a quarter rely on experts and objective sources of information (29 percent), with only 19 percent relying on more traditional mass communication outlets such as radio, television and direct mail.

American Express Publishing is dedicated to informing, enriching and empowering affluent Americans, and the Harrison Group specializes in understanding affluent and wealthy markets. Together, the two companies have partnered to produce this study, which provides an understanding of the consumers at the top 10 percent of the American financial pyramid.

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